Macerich (MAC) Q1 FFO Miss, Stock Declines on Y/Y NOI Fall

·4-min read

Shares of The Macerich Company MAC edged down 0.4% during the regular trading session on May 11 after the company reported a year-over-year decline in first-quarter 2021 revenues and a fall in occupancy across its portfolio.

Macerich delivered funds from operations (FFO) per share of 45 cents, excluding financing expenses in relation to Chandler Freehold, which marginally missed the Zacks Consensus Estimate of 46 cents. The figure also plunged 44.4% year over year.

The company generated revenues of $190.4 million in the first quarter of 2021. The figure declined 16% year over year. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $189.3 million.

The relaxation of government-mandated restrictions and high levels of vaccinations across the United States have resulted in significant improvement in sales and traffic across the company’s portfolio. In fact, in first-quarter 2021, comparable tenant sales across its portfolio were only 2% less than pre-pandemic levels in first-quarter 2019.

Moreover, the company’s rental collections remain strong at 95% and 97% of rents received for first-quarter 2021 and fourth-quarter 2020, respectively.

Behind the Headlines

At Mar 31, 2021, portfolio occupancy was 88.5%, declining from 89.7% at Dec 31, 2020. The company anticipates this to be the lowest level for post-pandemic occupancy.

Also, same-center net operating income or NOI (excluding lease termination income) slump 29% to $153.5 million from the prior-year number, owing to COVID-related rent abatements and occupancy erosion.

Nonetheless, as of Mar 31, 2021, average rent per square foot rose 1.6% year over year to $62.44. In the March-end quarter, Macerich signed 181 leases for 700,000 square feet of space, which almost reached leasing activity levels of first-quarter 2020.

As of Mar 31, 2021, it had cash and cash equivalents of $1.08 billion.

Dividend Update

On Apr 29, Macerich announced a quarterly cash dividend of 15 cents per share. The dividend will be paid out on Jun 3 to shareholders of record as of May 7, 2021.

Guidance

Assuming no further government-mandated shutdowns of its retail properties, the company reaffirmed 2021 FFO per share at $1.77-$1.97. The Zacks Consensus Estimate for the same is pegged at $1.83.

Currently, Macerich carries a Zacks Rank #5 (Strong Sell).

Macerich Company The Price, Consensus and EPS Surprise

Macerich Company The Price, Consensus and EPS Surprise
Macerich Company The Price, Consensus and EPS Surprise

Macerich Company The price-consensus-eps-surprise-chart | Macerich Company The Quote

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Retail REITs

Simon Property Group, Inc.’s SPG first-quarter 2021 funds from operations (FFO) per share of $2.48 handily surpassed the Zacks Consensus Estimate of $2.25. The performance was backed by better-than-expected top-line growth.The retail REIT also raised the 2021 FFO per share guidance and now projects the same at $9.70-$9.80, up from $9.50-$9.75 mentioned earlier.

Realty Income Corporation’s O first-quarter adjusted FFO per share of 86 cents beat the Zacks Consensus Estimate of 85 cents. The encouraging performance reflected improved quarterly revenues. The retail REIT also apprised of its rental receipts through Mar 31, 2021, and noted that it collected 94.1% of contractual rent due for the first quarter across the total portfolio.

Regency Centers Corporation’s REG first-quarter 2021 NAREIT FFO per share of 90 cents handily surpassed the Zacks Consensus Estimate of 75 cents. Results reflected higher-than-anticipated revenues. The retail REIT also issued an upbeat outlook. Total revenues of $274.7 million outpaced the Zacks Consensus Estimate of $255.5 million.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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